New Visa card will allow users to spend their bitcoin savings

A new Visa card being launched will soon allow users to spend their bitcoin savings.

London Block Exchange (LBX), a newly-launched website, says it will allow users to buy and sell cryptocurrencies, and has plans to launch a spending card in the coming weeks that will convert their holdings in bitcoin and other virtual currencies to pounds which they can spend on the high street.

The "Dragoncard" is designed to answer a key bitcoin criticism that it is largely a commodity with few applications in the real world. Only a few major companies accept payment in bitcoin, due to concerns about money laundering and other criminal activity.

Spending on the card by shoppers will be backed by LBX, which will pay the retailer in pounds and recoup the money from the shopper's online wallet. One of the cryptocurrencies they hold will be changed into pounds, charging a 0.5 per cent fee.

There have been attempts by other firms to launch similar cards, but LBX is the first to convert the cryptocurrency to pounds, and has been provisionally approved by the Financial Conduct Authority, the UK's financial regulator.

LBK had received £2 million in funding and is chaired by Adam Bryant, a long-time Credit Suisse banker who ran the Swiss bank's macro hedge fund team.

Bitcoin, as well as other cryptocurrencies including Ethereum and Ripple, have shot in value this year with Bitcoin rising from under $1,000 at the start of 2017 to almost $7,000 today. It is seen as a bubble by many senior figures in the financial industry.

Meanwhile, the Chicago Mercantile Exchange will soon begin trading Bitcoin derivatives (futures contracts). According to commentators, the move means the cryptocurrency is now a mainstream asset class.

The use of Bitcoin in the mainstream economy has been limited partly due to the volatility of its price. The value of the currency might go up or down significantly between the time of striking a deal and delivery.